U.S. Stocks Set To Open Higher As Durable Goods Orders Increase By 11.2%

Traders Prepare Themselves For Fed Chair Jerome Powell’s Speech At Jackson Hole Symposium

Markets are rather quiet today as traders wait for the key commentary of Fed Chair Jerome Powell which is set to speak at Jackson Hole Symposium on Thursday.

The key question is whether the Fed is ready to let inflation get above 2% in an effort to support the economic recovery after the acute phase of coronavirus crisis. If Powell signals that the Fed is ready to push inflation higher, stocks will get an additional boost while the U.S. dollar may suffer.

Such a scenario would also be bullish for commodities like oil and copper, as well as precious metals including gold and silver. However, if Powell is not dovish enough, stocks may pull back from record highs.

Hurricane Laura Continues To Support Oil Prices

WTI oil has managed to settle above the $43 level but failed to get above the nearest resistance at $43.50 as Hurricane Laura moved closer to the shore.

Currently, Laura is a Category 3 storm which may ultimately become a Catergory 4 storm when it hits the shore.

The key question for oil traders is whether the storm deals significant damage to refineries. For now, the threat from Laura was not sufficient enough to push oil prices to new highs but the market’s reaction may quickly change once the hurricane makes landfall.

Yesterday’s API Crude Oil Stock Change report was also positive for oil as it indicated that crude inventories decreased by 4.52 million barrels.

Durable Goods Orders Increase By 11.2%

U.S. has just provided Durable Goods Orders data for July. On a month-over-month basis, Durable Goods Orders rose by 11.2% compared to analyst estimates which called for growth of 4.3%.

The Durable Goods Orders report was much stronger than expected which could provide additional support to stocks and the U.S. dollar which continues its attempts to rebound against a broad basket of currencies ahead of Powell’s speech at Jackson Hole Symposium.

S&P 500 futures are gaining some ground in premarket trading after the release of the report.

For a look at all of today’s economic events, check out our economic calendar.